The EACB believes that the implementation of the criteria proposed in the delegated acts to the Taxonomy Regulation will play an important role in creating a uniform EU-definition of environmentally sustainable economic activities with regard to the first two environmental objectives established in the regulation (climate change mitigation and adaptation). However, we believe that (as shown on the example of the categories and activities below) the proposed draft technical screening criteria should be improved to safeguard an easy usability, avoiding inconsistencies due to the lack of clarity in wording and generally we argue to limit the many cross references present in the report. Here below you will find the main relevant comments on the proposal:
On the building sector, we believe the new wording proposed could represent a significant obstacle for a large number of buildings to be eligible according to the criteria for environmentally sustainable activities. We cautioned that the proposed requirement of energy label A would weaken the applicability of the Taxonomy and therefore slow down both the harmonization and promotion of green financing. To better understand the impact it might have, some of our members have quantified the reduction in houses' eligibility under the new wording (compared to the previous one) at around 90-95 %. This can lead to a 'de facto' disappearance of incentives for banks and borrowers to favor better houses within the building stock when taking the purchasing (and financing) decision, something against the objectives of the EU environmental agenda, and thus failing to impulse housing renovation.
Moreover, it should be noted that the '15% best' criterium is already a moving target, an objective that will become more demanding as time passes by, thus creating a positive trend towards higher requirements as the building stock is being renewed, and its average energy efficiency improves. That is why the '15% best' approach should not be taken as an easy target, or a threshold that risks creating stranded assets or lacking the needed incentives to improve energy efficiency.
The Taxonomy was supposed to take into account existing market practices that would make it easier to use and ensure it is aligned with existing green bond frameworks. However, if the criterion “energy label A” is applied, the Taxonomy will significantly diverge from existing market practices and current Green Bond market in Europe.
Similarly, since the vast majority of the DNSH criteria was built on existing EU regulations, the DNSH criteria should be such that fulfilment is easy to check for large numbers of buildings. At the moment for some DNSH criteria there is no data available to check whether a building fulfils the criteria or not.
For all these reasons, we believe the Taxonomy can promote green financing if, and only if, the criteria are achievable for a reasonable amount of assets. With the proposed change in criteria, the Taxonomy will not really incentivise financing of residential buildings.
A deeper analysis is included in the EACB position paper here attached.
For further information or questions please contact:
Ms. E. Bevilacqua (firstname.lastname@example.org)
Mr. G. Betti (email@example.com)